Over the past year, the storm clouds of recession have gathered, with shocking world events compounding the general air of economic uncertainty. Paul Coleman suggests ways a business can cope with an uncertain world.

We are living in uncertain times and the effect has been felt by many organisations. So how does a business cope? Cutting costs, reducing spending and hoping that economic confidence will return is one solution. The other is to take a 'belt and braces' approach, run a much tighter business ship and proactivity navigate through the choppy waters.
If anything is certain, it is change. It is an old adage but one that rings especially true today. In an uncertain climate, companies can be reluctant to make decisions. And, since spending has stagnated in many sectors, many know their customers are thinking the same way.
Although businesses remain cautious, they can take heart from economic indicators that imply a more positive horizon.
In the US, for example, analysts are growing confident as the economy grew unexpected in the last quarter of 2001, after shrinking in the previous period.
The story is similar across the Atlantic. The UK is enjoying the longest period of sustained non-inflationary growth in more than 30 years, but HM Treasury acknowledges that 'challenges and risks remain.'

Risks remain

Whichever viewpoint you endorse, there is little doubt that considerable risk remains, requiring predictability and security to be put back into the business picture. In the words of the management consultants McKinsey, business has become 'exponentially more daunting'.
Old approaches to strategy are based on the assumption that executives, with the right analytical tools, can predict the future of a business accurately enough to choose a clear strategic direction for it.
But this vision often requires uncertainty to be largely discounted in order to create a vision precise enough to satisfy the financial controller. In its report, Strategy in an uncertain world (Dec-01), McKinsey said: "Globalisation, digitalisation, and unfettered capital markets have all helped make traditional strategy tools such as market research, value chain analysis, and discounted-cash-flow analysis less useful."

Principles

So what principles should underpin a business approach within an uncertain world?
u Think positively. Uncertain times need a steady hand and a level head. Negativity simply induces panic. Many would claim that panic prompted all the talk of a recession earlier in 2001 - and played a key role in reducing business confidence at that time. A positive mindset is vital to a positive approach. Instead, the fresh challenges each day should be viewed as new opportunities to be managed.
u Get to know your business better. It's difficult to keep an eye on everything across a large corporation, but technology can help you to know much more about your business. Debtor days, margins, receivables, inventory turnover and much more can be accessed in real-time across the globe. Executives can make decisions based on the state of their organisation today, rather than how it was a few weeks ago. And through automatically generated alerts via e-mail and SMS messages to your mobile, problems can be highlighted immediately rather than eventually.

Identifying inefficiencies

By analysing your company, enterprise-wide efficiencies can be identified. Imagine the scenario of a financial director in Asia-Pacific looking at his professional services operations. He reviews his regional reports and asks: "Why is my Hong Kong operation outsourcing services to a third party elsewhere in China when my Singapore office has Mandarin speaking staff available?"
Without centralised systems, major savings can be missed and burdens must be carried.
By using an enterprise-wide approach backed by the right technology solution, businesses can make more efficient and better-informed decisions, as well as streamline the working environment and empower employees. This will make the business more cost effective in the long-run.
Better business information is a financial officer's number one weapon. But such an approach does require a business to spend money and adopt a longer-term strategy if it is going to control costs. By identifying clear objectives and installing fit-for-purpose systems, the return on investment can be swift.

Controlling consts

Technology can now help control costs in a number of ways:
* By streamlining administrative tasks through efficient time and expense capture, companies can reduce billing cycle times and enhance cash collection.
* The quicker the finance department can produce the figures, the faster management can respond. For example, monthly accounts that take two weeks to produce leave little time for action to be taken before the next monthly accounts are produced. With real-time financial intelligence software, accounts can be produced and analysed in days.
SunSystems is the core product range of the Systems Union Group plc, which is quoted on the Alternative Investment Market (AIM) of the London Stock Exchange. The company is one of the largest business software houses in the world, with 20 offices world-wide and some 200 Channel Partners in 76 countries.
Products within the SunSystems range are available in 30 languages with over 18000 customer sites, and 250000 customer seats in some 194 countries. The software solutions are used extensively by multinationals, whose offices world-wide require an international product with global support infrastructure.
Customers include 15 of the world's 16 largest corporations, 60 of the FTSE100, one quarter of the Fortune 500, and names such as Melbourne Cricket Club, Hilton International, BP and Save the Children Fund. The company is the largest supplier of financial software to the British public sector, and is the largest supplier of business software into Hong Kong and Japan.

For more information, visit www.sun.com